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How to tell NSE has bottomed out
Rank: Chief Joined: 8/4/2010 Posts: 8,977
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The FTSE vs FTSE NSE indices divergence is an excellent opportunity for those that can see it. The moment the sovereign debt crisis strikes, equities will meltup beyond reason... $15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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Rank: Member Joined: 1/3/2014 Posts: 257
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hisah wrote:The FTSE vs FTSE NSE indices divergence is an excellent opportunity for those that can see it.
The moment the sovereign debt crisis strikes, equities will meltup beyond reason... @hisah which NSE FTSE? 15 or 25. Is there a site that allows viewing of both to ease comparison? Yes once govt bonds go belly up, equities will rally.
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Rank: Chief Joined: 8/4/2010 Posts: 8,977
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snipermnoma wrote:hisah wrote:The FTSE vs FTSE NSE indices divergence is an excellent opportunity for those that can see it.
The moment the sovereign debt crisis strikes, equities will meltup beyond reason... @hisah which NSE FTSE? 15 or 25. Is there a site that allows viewing of both to ease comparison? Yes once govt bonds go belly up, equities will rally. I use the FT.com site.
NSE indices have fared poorly since the beginning of 2016 as seen on the cartoon below. Diverging from global stocks. 
Meanwhile the bank stocks gap downs are getting filled in equal energy as the bounce back hits swiftly. FTSE NSE KE indices are filling the gap today with gains above 3% intraday. However, the technical critical support damage is strong. Those rushing in thinking this is a bottom, caution!
$15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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Rank: Veteran Joined: 6/17/2009 Posts: 1,616
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hisah wrote:snipermnoma wrote:hisah wrote:The FTSE vs FTSE NSE indices divergence is an excellent opportunity for those that can see it.
The moment the sovereign debt crisis strikes, equities will meltup beyond reason... @hisah which NSE FTSE? 15 or 25. Is there a site that allows viewing of both to ease comparison? Yes once govt bonds go belly up, equities will rally. I use the FT.com site.
NSE indices have fared poorly since the beginning of 2016 as seen on the cartoon below. Diverging from global stocks.
Meanwhile the bank stocks gap downs are getting filled in equal energy as the bounce back hits swiftly. FTSE NSE KE indices are filling the gap today with gains above 3% intraday. However, the technical critical support damage is strong. Those rushing in thinking this is a bottom, caution!
I am no cartoonist but the demand supply situation in KCB and Equity does not convince me they will rally much more from here.On the broader market EABL goes ex dividend tomorrow and Safaricom on Monday and those two could pull the market further south.
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Rank: Veteran Joined: 9/18/2014 Posts: 1,127
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cnn wrote:hisah wrote:snipermnoma wrote:hisah wrote:The FTSE vs FTSE NSE indices divergence is an excellent opportunity for those that can see it.
The moment the sovereign debt crisis strikes, equities will meltup beyond reason... @hisah which NSE FTSE? 15 or 25. Is there a site that allows viewing of both to ease comparison? Yes once govt bonds go belly up, equities will rally. I use the FT.com site.
NSE indices have fared poorly since the beginning of 2016 as seen on the cartoon below. Diverging from global stocks.
Meanwhile the bank stocks gap downs are getting filled in equal energy as the bounce back hits swiftly. FTSE NSE KE indices are filling the gap today with gains above 3% intraday. However, the technical critical support damage is strong. Those rushing in thinking this is a bottom, caution!
I am no cartoonist but the demand supply situation in KCB and Equity does not convince me they will rally much more from here.On the broader market EABL goes ex dividend tomorrow and Safaricom on Monday and those two could pull the market further south. Seconded. The index is a hair's breadth above the 3000 mark yet safcom is at or near its all time highs, Eabl is trading at a premium likewise for BAT and a couple more counters. Equity and Kcb have been relegated from the untouchable big boy club...same fate awaits the remaining set for the bottom to give way. Close to 2400 points down and overvalued stocks abound in their numbers. This ain't over in my opinion. My guess is that the next downleg aka the sub 3000 journey will be swifter than what we have been subjected to thus far. The main purpose of the stock market is to make fools of as many people as possible.
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Rank: Member Joined: 1/3/2014 Posts: 257
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Thanks @hisah for the cartoon. Quite telling.
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Rank: Member Joined: 7/1/2014 Posts: 895 Location: sky
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http://www.businessdailyafrica.com/NSE-listed-firms-face-more-stringent-auditing-standards-/539552-3366394-12og3r9z/index.htmlMr Mugasa said the focus on KAM was a result of the concerns following the 2008 global financial crisis that saw auditors come increasingly under scrutiny for failure to forewarn stakeholders about key corporate and economic developments affecting the financial position and going concern-basis of the firms they audited. Auditors were accused of not drawing attention to the factors that could affect the viability of the companies before they collapsed in the aftermath of the financial crisis. “From now on, an audit report will start with giving you the audit opinion and then proceed to elaborate on key audit matters for the year. This will not necessarily be negative information, but merely to say what major factors were at play for the company during the year,” said Mr Mugasa. There are only two emotions in the stock market, fear and hope. The problem is, you hope when you should fear and fear when you should hope
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Rank: Chief Joined: 8/4/2010 Posts: 8,977
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littledove wrote:http://www.businessdailyafrica.com/NSE-listed-firms-face-more-stringent-auditing-standards-/539552-3366394-12og3r9z/index.htmlMr Mugasa said the focus on KAM was a result of the concerns following the 2008 global financial crisis that saw auditors come increasingly under scrutiny for failure to forewarn stakeholders about key corporate and economic developments affecting the financial position and going concern-basis of the firms they audited. Auditors were accused of not drawing attention to the factors that could affect the viability of the companies before they collapsed in the aftermath of the financial crisis. “From now on, an audit report will start with giving you the audit opinion and then proceed to elaborate on key audit matters for the year. This will not necessarily be negative information, but merely to say what major factors were at play for the company during the year,” said Mr Mugasa. What incentives exist for the audit firms in order for them to shoot the hand that feeds them? Reading rating agency reports or auditor reports like the gospel truth is one sure way of flying blind! When vested interests are sky high, the gatekeepers are paid well to look the other way. The markets have operated this way for eons.$15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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Rank: Veteran Joined: 6/23/2014 Posts: 1,652
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hisah wrote:littledove wrote:http://www.businessdailyafrica.com/NSE-listed-firms-face-more-stringent-auditing-standards-/539552-3366394-12og3r9z/index.htmlMr Mugasa said the focus on KAM was a result of the concerns following the 2008 global financial crisis that saw auditors come increasingly under scrutiny for failure to forewarn stakeholders about key corporate and economic developments affecting the financial position and going concern-basis of the firms they audited. Auditors were accused of not drawing attention to the factors that could affect the viability of the companies before they collapsed in the aftermath of the financial crisis. “From now on, an audit report will start with giving you the audit opinion and then proceed to elaborate on key audit matters for the year. This will not necessarily be negative information, but merely to say what major factors were at play for the company during the year,” said Mr Mugasa. What incentives exist for the audit firms in order for them to shoot the hand that feeds them? Reading rating agency reports or auditor reports like the gospel truth is one sure way of flying blind! When vested interests are sky high, the gatekeepers are paid well to look the other way. The markets have operated this way for eons. Auditors are not witch hunters.There scope is only limited to the information provided by management. Hutia Mundu!!
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Rank: Chief Joined: 1/3/2007 Posts: 18,055 Location: Nairobi
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Wamunyota wrote:hisah wrote:littledove wrote:http://www.businessdailyafrica.com/NSE-listed-firms-face-more-stringent-auditing-standards-/539552-3366394-12og3r9z/index.htmlMr Mugasa said the focus on KAM was a result of the concerns following the 2008 global financial crisis that saw auditors come increasingly under scrutiny for failure to forewarn stakeholders about key corporate and economic developments affecting the financial position and going concern-basis of the firms they audited. Auditors were accused of not drawing attention to the factors that could affect the viability of the companies before they collapsed in the aftermath of the financial crisis. “From now on, an audit report will start with giving you the audit opinion and then proceed to elaborate on key audit matters for the year. This will not necessarily be negative information, but merely to say what major factors were at play for the company during the year,” said Mr Mugasa. What incentives exist for the audit firms in order for them to shoot the hand that feeds them? Reading rating agency reports or auditor reports like the gospel truth is one sure way of flying blind! When vested interests are sky high, the gatekeepers are paid well to look the other way. The markets have operated this way for eons. Auditors are not witch hunters.There scope is only limited to the information provided by management. If one does not trust the Board or Management, do not bother investing in the firm. I do not touch firms controlled by Merali, Matu, Obura, Nyammo, etc for this reason. Among the not-to-be-touched include GoK firms [except KenRe for now]. Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Chief Joined: 8/4/2010 Posts: 8,977
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VituVingiSana wrote:Wamunyota wrote:hisah wrote:littledove wrote:http://www.businessdailyafrica.com/NSE-listed-firms-face-more-stringent-auditing-standards-/539552-3366394-12og3r9z/index.htmlMr Mugasa said the focus on KAM was a result of the concerns following the 2008 global financial crisis that saw auditors come increasingly under scrutiny for failure to forewarn stakeholders about key corporate and economic developments affecting the financial position and going concern-basis of the firms they audited. Auditors were accused of not drawing attention to the factors that could affect the viability of the companies before they collapsed in the aftermath of the financial crisis. “From now on, an audit report will start with giving you the audit opinion and then proceed to elaborate on key audit matters for the year. This will not necessarily be negative information, but merely to say what major factors were at play for the company during the year,” said Mr Mugasa. What incentives exist for the audit firms in order for them to shoot the hand that feeds them? Reading rating agency reports or auditor reports like the gospel truth is one sure way of flying blind! When vested interests are sky high, the gatekeepers are paid well to look the other way. The markets have operated this way for eons. Auditors are not witch hunters.There scope is only limited to the information provided by management. If one does not trust the Board or Management, do not bother investing in the firm. I do not touch firms controlled by Merali, Matu, Obura, Nyammo, etc for this reason. Among the not-to-be-touched include GoK firms [except KenRe for now]. Both of you are right and my point was this audit rule is just using the wrong medicine to cure the issue. The disease is corporate governance. Jail and ban for life the known shoddy individuals that have been looting shareholders and their firms.$15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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Rank: Chief Joined: 1/3/2007 Posts: 18,055 Location: Nairobi
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hisah wrote:VituVingiSana wrote:Wamunyota wrote:hisah wrote:littledove wrote:http://www.businessdailyafrica.com/NSE-listed-firms-face-more-stringent-auditing-standards-/539552-3366394-12og3r9z/index.htmlMr Mugasa said the focus on KAM was a result of the concerns following the 2008 global financial crisis that saw auditors come increasingly under scrutiny for failure to forewarn stakeholders about key corporate and economic developments affecting the financial position and going concern-basis of the firms they audited. Auditors were accused of not drawing attention to the factors that could affect the viability of the companies before they collapsed in the aftermath of the financial crisis. “From now on, an audit report will start with giving you the audit opinion and then proceed to elaborate on key audit matters for the year. This will not necessarily be negative information, but merely to say what major factors were at play for the company during the year,” said Mr Mugasa. What incentives exist for the audit firms in order for them to shoot the hand that feeds them? Reading rating agency reports or auditor reports like the gospel truth is one sure way of flying blind! When vested interests are sky high, the gatekeepers are paid well to look the other way. The markets have operated this way for eons. Auditors are not witch hunters.There scope is only limited to the information provided by management. If one does not trust the Board or Management, do not bother investing in the firm. I do not touch firms controlled by Merali, Matu, Obura, Nyammo, etc for this reason. Among the not-to-be-touched include GoK firms [except KenRe for now]. Both of you are right and my point was this audit rule is just using the wrong medicine to cure the issue. The disease is corporate governance. Jail and ban for life the known shoddy individuals that have been looting shareholders and their firms. Agreed. Lakini, #ThisIsKenya where the crooks get feted. I hear Waiguru is running for some office somewhere. Kidero is the Nairobi governor. Pattni ran for MP. And the list goes on and on. Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Member Joined: 1/3/2014 Posts: 257
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VituVingiSana wrote:Wamunyota wrote:hisah wrote:littledove wrote:http://www.businessdailyafrica.com/NSE-listed-firms-face-more-stringent-auditing-standards-/539552-3366394-12og3r9z/index.htmlMr Mugasa said the focus on KAM was a result of the concerns following the 2008 global financial crisis that saw auditors come increasingly under scrutiny for failure to forewarn stakeholders about key corporate and economic developments affecting the financial position and going concern-basis of the firms they audited. Auditors were accused of not drawing attention to the factors that could affect the viability of the companies before they collapsed in the aftermath of the financial crisis. “From now on, an audit report will start with giving you the audit opinion and then proceed to elaborate on key audit matters for the year. This will not necessarily be negative information, but merely to say what major factors were at play for the company during the year,” said Mr Mugasa. What incentives exist for the audit firms in order for them to shoot the hand that feeds them? Reading rating agency reports or auditor reports like the gospel truth is one sure way of flying blind! When vested interests are sky high, the gatekeepers are paid well to look the other way. The markets have operated this way for eons. Auditors are not witch hunters.There scope is only limited to the information provided by management. If one does not trust the Board or Management, do not bother investing in the firm. I do not touch firms controlled by Merali, Matu, Obura, Nyammo, etc for this reason. Among the not-to-be-touched include GoK firms [except KenRe for now]. @vvs Thoughts on flametree?
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Rank: Chief Joined: 1/3/2007 Posts: 18,055 Location: Nairobi
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@Sniper - I am positive on FTGH but it is NOT a core holding for me at this point. Buy with caution coz manufacturing is hard in Kenya. Equity Bank's CEO, JM, fired shots at KCB!!! All loans & credit facilities will be at CBR + 4%. Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Member Joined: 1/3/2014 Posts: 257
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VituVingiSana wrote:@Sniper - I am positive on FTGH but it is NOT a core holding for me at this point. Buy with caution coz manufacturing is hard in Kenya.
Equity Bank's CEO, JM, fired shots at KCB!!! All loans & credit facilities will be at CBR + 4%. I am considering FTGH. I get their business but the majority shareholder's stake is frighteningly large. Basically, he is the sole decision maker which is a double edged sword.
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Rank: Chief Joined: 1/3/2007 Posts: 18,055 Location: Nairobi
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snipermnoma wrote:VituVingiSana wrote:@Sniper - I am positive on FTGH but it is NOT a core holding for me at this point. Buy with caution coz manufacturing is hard in Kenya.
Equity Bank's CEO, JM, fired shots at KCB!!! All loans & credit facilities will be at CBR + 4%. I am considering FTGH. I get their business but the majority shareholder's stake is frighteningly large. Basically, he is the sole decision maker which is a double edged sword. Even with 30%, a major shareholder of a firm with diverse shareholder base calls the shots. Look at NIC, KQ, etc. Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Chief Joined: 8/4/2010 Posts: 8,977
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The crowd has shifted to tbills and tbonds just when the party is about to peak! Perfect... $15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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Rank: Elder Joined: 12/4/2009 Posts: 10,639 Location: NAIROBI
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@hisah Guys are expecting banking stocks to rally with interest rate cap bill.Funny thinking hapo. We are in a deep sword as banks will; -Reduce lending to Mwananchi and focus more on corporates/institutions and GoK --Limit withdrawals by Mwananchi for them to earn interest Bear run will persist and insurance companies and pension schemes with huge exposure to the quoted equity mkt will suffer losses. Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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Rank: Elder Joined: 9/23/2009 Posts: 8,083 Location: Enk are Nyirobi
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snipermnoma wrote:VituVingiSana wrote:@Sniper - I am positive on FTGH but it is NOT a core holding for me at this point. Buy with caution coz manufacturing is hard in Kenya.
Equity Bank's CEO, JM, fired shots at KCB!!! All loans & credit facilities will be at CBR + 4%. I am considering FTGH. I get their business but the majority shareholder's stake is frighteningly large. Basically, he is the sole decision maker which is a double edged sword. As company grows, he will cash out some of his investment. He has a huge piece of a small cake but with time he will have a small piece of a huge cake. listing at NSE was a major milestone Life is short. Live passionately.
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Rank: Chief Joined: 8/4/2010 Posts: 8,977
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Ericsson wrote:@hisah
Guys are expecting banking stocks to rally with interest rate cap bill.Funny thinking hapo.
We are in a deep sword as banks will;
-Reduce lending to Mwananchi and focus more on corporates/institutions and GoK
--Limit withdrawals by Mwananchi for them to earn interest
Bear run will persist and insurance companies and pension schemes with huge exposure to the quoted equity mkt will suffer losses. US Fed Bank (FOMC meeting) is on the Wednesday 21st and CBK MPC meeting is on the following day. Let's see what the tape will play.
Since the rate cap law was passed KES has not gained vs USD as a knee-jerk reaction trying to price in the expected credit crunch (deflation). KES should be gaining in strength by now.
IMF is not puking, no threats et al coz of the rate cap. Why?
The banks after the rate cap are not singing in unison anymore. Innovative banking now to kick in due to the credit facility competition that exist via external funding (eurobonds etc).
Global pension schemes are soon going to start to look for positive yield as NIRP continues to bite.
FDI flows to EA at still on the rise.
Like I've said before, I'm not looking at KE from local economics, but from a global point of view.
This time it's different.
May be I'm just a lunatic 
$15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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